Full year 2017 total revenue of $302.2 million, a 41% increase over 2016. Full year 2017 net product sales of $294.1 million, a 40% increase over 2016, were at the top end of Company guidance.

Full year 2017 operating earnings of $99.5 million, an 84% increase over 2016, exceeded Company guidance of $85 million to $90 million.

Full year 2017 GAAP diluted earnings per share of $1.08, compared to $1.76 in 2016. Adjusting for one-time impacts in 2017 and 2016, non-GAAP diluted earnings per share in 2017 of $1.26, compared to $0.68 in 2016, increased by 85%.

(1) See reconciliation of GAAP diluted EPS to non-GAAP diluted EPS in table at the end of this release.

ROCKVILLE, Md., Feb. 27, 2018 (GLOBE NEWSWIRE) -- Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, today reported record financial results for the fourth quarter and full year 2017 and associated Company developments.

Commercial Update

Fourth quarter 2017 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IQVIA (formerly IMS), totaled 198,715, a 47.3% increase over the fourth quarter of 2016. Full year 2017 product prescriptions for Trokendi XR® and Oxtellar XR®, as reported by IQVIA, totaled 672,709, a 33.8% increase over full year 2016.

Prescriptions

Q4 2017

Q4 2016

Change %

FY 2017

FY 2016

Change %

Trokendi XR

162,208

101,869

59.2%

533,541

378,584

40.9%

Oxtellar XR

36,507

33,081

10.4%

139,168

124,270

12.0%

Total

198,715

134,950

47.3%

672,709

502,854

33.8%

Source: IQVIA

Net product sales for the fourth quarter of 2017 were $86.3 million, a 41.2% increase over $61.1 million in the same period in the prior year. Net product sales for full year 2017 were $294.1 million, a 40.0% increase over $210.1 million in 2016.

Net Product Sales ($millions)

Q4 2017

Q4 2016

Change %

FY 2017

FY 2016

Change %

Trokendi XR

$69.1

$46.7

48.0%

$226.5

$158.4

43.0%

Oxtellar XR

$17.2

$14.4

19.4%

$67.6

$51.7

30.8%

Total

$86.3

$61.1

41.2%

$294.1

$210.1

40.0%

“The strong financial results achieved in the fourth quarter and full year of 2017 reflect the successful launch of Trokendi XR in migraine, as well as continued double digit growth by Oxtellar XR,” said Jack Khattar, President and CEO of Supernus Pharmaceuticals. “These results substantiate the value our products provide to patients and the impressive execution of our commercial organization.”

Progress of Product Pipeline

Overall enrollment in the four Phase III trials for SPN-812, a novel non-stimulant for the treatment of ADHD, is approximately 38% complete. The program consists of four three-arm, placebo-controlled trials: two pediatric trials and two adolescent trials. The Company expects to continue enrollment through mid-2018 and to have data from this Phase III program available by the first quarter of 2019.

Enrollment continues in both Phase III trials (P301 and P302) for SPN-810, currently in development for Impulsive Aggression in pediatric patients who have ADHD. Enrollment in P301 and P302 is approximately 80% and 65% complete, respectively, and is expected to continue through mid-2018, with data from the trials anticipated by the first quarter of 2019. In addition, a Phase III trial for SPN-810 treating Impulsive Aggression in adolescents who have ADHD is anticipated to start mid-2018. This adolescent trial is not expected to materially affect the overall timing of the regulatory submission process for SPN-810.

Regarding Oxtellar XR, the investigator-sponsored trial in bipolar disorder is expected to complete enrollment by year end 2018.

“Our strategy in 2018 is to advance SPN-810 and SPN-812 through Phase III clinical development, moving us closer to our goal of delivering from our current pipeline two novel products, both addressing billion-dollar market opportunities,” said Jack Khattar. “In addition, we remain focused on progressing Oxtellar XR as a potential therapy for bipolar disorder, another clinically important and significant commercial opportunity for Supernus.”

Operating Expenses

Research and development expenses in the fourth quarter of 2017 were $16.2 million, as compared to $13.3 million in the same quarter last year, and, for the full year 2017, $49.6 million, as compared to $42.8 million for 2016. These increases were due primarily to the initiation of the four Phase III clinical trials for SPN-812 in the second half of 2017.

Selling, general and administrative expenses in the fourth quarter of 2017 were $33.8 million, as compared to $29.1 million in the same quarter last year, and, for the full year 2017, $137.9 million as compared to $106.0 million in 2016. The increases for both periods were due primarily to the expansion of the salesforce by 40 salespeople, which was fully deployed in the fourth quarter of 2017, the development and production of promotional materials and marketing programs associated with the launch of the migraine indication for Trokendi XR, and an increase in share-based compensation expense.

Operating Earnings and Earnings Per Share

Operating earnings in the fourth quarter of 2017 were $34.3 million, a 110.4% increase over $16.3 million in the same period the prior year. Operating earnings in full year 2017 were $99.5 million, an 83.6% increase over $54.2 million in 2016. The improvement in operating earnings in both periods was primarily due to increased net product sales.

Net earnings (GAAP) in the fourth quarter of 2017 was $13.7 million, as compared to $14.3 million in the same period last year. Net earnings (GAAP) were $57.3 million in 2017, as compared to $91.2 million in 2016. The decrease was due primarily to the increase in research and development and selling, general and administrative spending, the increase in income tax expense as a result of the elimination of the valuation allowance against deferred tax assets in 2016, and the impact of the Tax Cuts and Jobs Act (Tax Act) in 2017.

Full year 2017 net earnings would have increased by 90.3% to $67.0 million, compared to $35.2 million in 2016, if net earnings were adjusted to eliminate the one-time favorable impact of releasing the valuation allowance on deferred tax assets in 2016, and eliminating the one-time unfavorable impact related to the passage of the Tax Act in 2017. (See reconciliation of GAAP net earnings to non-GAAP net earnings in the table at the end of this release).

Diluted earnings per share (GAAP) were $1.08 in 2017, compared to $1.76 in 2016. Adjusting for the aforementioned tax effects in 2016 and 2017, diluted earnings per share in 2017 would have increased by 85.3% to $1.26, compared to $0.68 in 2016. (See reconciliation of GAAP diluted EPS to non-GAAP diluted EPS in the table at the end of this release).

Weighted-average diluted common shares outstanding were approximately 53.5 million and 53.3 million in the fourth quarter and full year of 2017, respectively, as compared to approximately 52.0 million and 51.7 million in each of the respective prior year periods.

As of December 31, 2017, the Company had $273.7 million in cash, cash equivalents, marketable securities, and long term marketable securities, a $108.2 million increase over $165.5 million at December 31, 2016.

Financial Guidance

For full year 2018, the Company estimates net product sales, research and development expenses, operating earnings, and an effective tax rate as set forth below:

Net product sales in the range of $375 million to $400 million.

Research and development expenses of approximately $80 million.

Operating earnings in the range of $125 million to $135 million, including approximately $7 million of licensing and non-cash royalty revenue.

Effective tax rate of approximately 23% to 25%.

Conference Call Details

The Company will hold a conference call hosted by Jack Khattar, President and Chief Executive Officer, and Greg Patrick, Vice President and Chief Financial Officer, to discuss these results at 9:00 a.m. Eastern Time, on Wednesday, February 28, 2018. An accompanying webcast also will be provided.

Please refer to the information below for conference call dial-in information and webcast registration. Callers should dial in approximately 10 minutes prior to the start of the call.

Following the live call, a replay will be available on the Company's website, www.supernus.com, under “Investor Relations”.

About Supernus Pharmaceuticals, Inc.

Supernus Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases. The Company currently markets Trokendi XR® (extended-release topiramate) for the prophylaxis of migraine and the treatment of epilepsy, and Oxtellar XR® (extended-release oxcarbazepine) for the treatment of epilepsy. The Company is also developing several product candidates to address large market opportunities in psychiatry, including SPN-810 for the treatment of Impulsive Aggression in ADHD patients and SPN-812 for the treatment of ADHD.

Forward-Looking Statements:

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements do not convey historical information, but relate to predicted or potential future events that are based upon management's current expectations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition to the factors mentioned in this press release, such risks and uncertainties include, but are not limited to, the Company’s ability to sustain and increase its profitability; the Company’s ability to raise sufficient capital to fully implement its corporate strategy; the implementation of the Company’s corporate strategy; the Company’s future financial performance and projected expenditures; the Company’s ability to increase the number of prescriptions written for each of its products; the Company’s ability to increase its net revenue; the Company’s ability to enter into future collaborations with pharmaceutical companies and academic institutions or to obtain funding from government agencies; the Company’s product research and development activities, including the timing and progress of the Company’s clinical trials, and projected expenditures; the Company’s ability to receive, and the timing of any receipt of, regulatory approvals to develop and commercialize the Company’s product candidates; the Company’s ability to protect its intellectual property and operate its business without infringing upon the intellectual property rights of others; the Company’s expectations regarding federal, state and foreign regulatory requirements; the therapeutic benefits, effectiveness and safety of the Company’s product candidates; the accuracy of the Company’s estimates of the size and characteristics of the markets that may be addressed by its product candidates; the Company’s ability to increase its manufacturing capabilities for its products and product candidates; the Company’s projected markets and growth in markets; the Company’s product formulations and patient needs and potential funding sources; the Company’s staffing needs; and other risk factors set forth from time to time in the Company’s filings with the Securities and Exchange Commission made pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update the information in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events.

Non-GAAP Financial Results

Financial results for 2017 and 2016 are presented on both a reported and a non-GAAP basis. Reported results were prepared in accordance with GAAP and include all revenue and expenses recognized during the period. Non-GAAP results adjust for certain one-time adjustments that are unusual or unpredictable. Management believes non-GAAP financial measures provide useful information to investors regarding the Company's results of operations and assist management, analysts, and investors in evaluating the performance of the business. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. For a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, please refer to the table at the end of this press release.

Supernus Pharmaceuticals, Inc.

Consolidated Balance Sheets

(in thousands, except share amounts)

December 31,

December 31,

2017

2016

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

100,304

$

66,398

Marketable securities

39,736

23,723

Accounts receivable, net

65,586

41,527

Inventories, net

16,304

16,801

Prepaid expenses and other current assets

6,521

2,955

Total current assets

228,451

151,404

Long term marketable securities

133,638

75,410

Property and equipment, net

5,124

4,344

Intangible assets, net

36,019

36,350

Other non-current assets

389

331

Deferred income taxes

20,843

41,729

Total assets

$

424,464

$

309,568

Liabilities and stockholders' equity

Current liabilities

Accounts payable

$

6,844

$

8,055

Accrued sales deductions

68,343

41,943

Accrued expenses

27,305

27,427

Income taxes payable

15,938

7

Non-recourse liability related to sale of future royalties, current portion

4,283

3,101

Deferred licensing revenue

287

209

Total current liabilities

123,000

80,742

Deferred licensing revenue, net of current portion

1,149

1,501

Convertible notes, net

-

4,165

Non-recourse liability related to sale of future royalties, long term

22,258

27,289

Other non-current liabilities

10,577

4,002

Derivative liabilities

-

114

Total liabilities

156,984

117,813

Stockholders' equity

Common stock, $0.001 par value, 130,000,000 shares authorized at December 31, 2017 and December 31, 2016; 51,314,850 and 49,971,267 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively

Reconciliation of U.S. GAAP diluted earnings per share to Non-GAAP diluted earnings per share:

Year Ended December 31,

2017

2016

(unaudited)

As reported Diluted EPS (GAAP)

$

1.08

$

1.76

Adjusted for specific one-time adjustments:

Release of valuation allowance on deferred tax assets (1)

-

(1.08

)

Impact of the Tax Cuts and Jobs Act (1)

0.18

-

As adjusted Diluted EPS (Non-GAAP)

$

1.26

$

0.68

Weighted Average Diluted Shares

53,301,150

51,708,983

(1

)

Non-GAAP adjustments relate primarily to the income tax adjustment on deferred tax assets and are calculated using the statutory income tax rate in effect at the time the deferred tax assets are expected to reverse. In 2016, the Company eliminated the valuation allowance on deferred tax assets. The Company has no recorded valuation allowance on its deferred tax assets in 2017. In 2017, the Company wrote down its net deferred tax assets to reflect the estimated impact of the decrease in federal statutory rates, as specified in the new tax legislation on the value of the Company’s net deferred tax assets. The newly enacted Tax Cuts and Jobs Act lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018.